Top 13 Dividend ETFs Outperforming the S&P 500

Morningstar has compiled a list of 13 dividend exchange-traded funds (ETFs) that earn top marks and have trailing 12-month yields that beat the S&P 500's 1. The ETFs offer market-beating yields and are favored by Morningstar based on its criteria.

Morningstar has compiled a list of 13 dividend exchange-traded funds (ETFs) that earn top marks and have trailing 12-month yields that beat the S&P 500's 1%. These ETFs offer market-beating yields and are favored by Morningstar based on its criteria.

According to Daniel Sotiroff, senior manager research analyst for Morningstar, the firm's top picks are the Vanguard High Dividend Yield ETF (VYM) and the Schwab U.S. Dividend Equity ETF (SCHD), which strike a balance between yield and risk. For dividend growth, the Vanguard Dividend Appreciation ETF (VIG) is Morningstar's top pick, offering stable profits and regular dividend increases. For actively managed funds, the Capital Group Dividend Value ETF (CGDV) is at the top of the list, offering a higher yield while controlling risks.

Other notable funds on Morningstar's list include the Fidelity High Dividend ETF (FDVV), Franklin U.S. Low Volatility High Dividend ETF (LVHD), and Schwab International Dividend Equity ETF (SCHY), among others. These funds have varying yields and risk profiles, catering to different investor preferences.

Dividend funds have grown in popularity over the last 15 years due to investors seeking income and the zero-interest-rate environment. However, the ETF ecosystem is also seeing a rise in option income products, which offer higher yields and are taking some market share away from dividend ETFs.

References:
[1] https://www.etf.com/sections/news/morningstar-best-high-dividend-etfs-passive-income
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L4N3TL2DZ:0-ubs-morningstar-raise-earnings-forecasts-for-australia-s-woodside-energy/